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Multifamily Bond Program

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The purpose of the Multifamily Bond Program is to increase the construction and rehabilitation of multifamily rental housing for families with limited incomes. Tax-exempt bonds and notes provide construction and permanent financing and leverage federal Low-Income Housing Tax Credits​.

Eligible Types of Housing

Rental housing financed through the program may be new construction, acquisition, and rehabilitation of existing housing, and must contain a minimum of five units. Loans may be provided to refinance existing high interest rate private loans if the refinance is in conjunction with rehabilitation of the housing. Projects using tax-exempt bond financing must contain complete independent dwelling units. Single-room occupancy units and shared housing may be financed only with taxable bonds or 501(c)(3) bonds if owned by an eligible nonprofit corporation. Projects financed with tax-exempt bonds must comply with the Maryland Qualified Allocation Plan in order to receive unallocated 4% Low Income Housing Tax Credits.

Eligible Applicants

For-profit and nonprofit developers may apply for Multifamily Bond loans.

Eligible Residents

A sponsor of a project funded with​ tax-exempt bonds has a choice of making 20 of the units available to households earning 50 percent or less of the area median income, or making 40 percent of the units available to households earning 60 percent or less of the area median income.

Loan Terms

Interest rates are based upon the Community Development Administration's bond rate. Loan terms are generally 30 to 40​ years. A first lien position is generally required for all bond loans. All loans funded with tax-exempt bonds must comply with federal requirements established for tax-exempt revenue bonds.

Mortgage Insurance

All loans must ​be insured or have other forms of credit enhancement acceptable to the program. The Community Development Administration is a participant in the Federal Housing Administration/ Housing Finance Agency Risk Sharing Program which delegates insurance underwriting to states' Housing Finance Agencies.

Pairing Taxable GNMA Loans with Tax-Exempt Bonds

On February 6, 2018, the Maryland Department of Housing and Community Development (“DHCD”) issued a guidance memo regarding a new financing technique to be used to facilitate multifamily rental development activity that includes tax-exempt housing revenue bonds (the “Bonds”) and 4% Low Income Housing Tax Credits (the “Tax Credits”). The financing technique enables qualified multifamily rental housing developments to realize the lower interest rates associated with taxable GNMA loan executions (the “GNMA Loan”) in conjunction with the Tax Credits available with tax-exempt bond issuances (“Tax/TE Financing”).